SAE Brake Materials Environmental Task Force Product Marking Update with the Brake Manufacturers Council Steve Brown Chair, SAE Brake Materials Environmental Task Force June 3, 2011

COSMO | PRODUCT CHEMICAL ASSESSMENT ENGINE CONFIDENTIAL Product Marking (Lining Edge Code) 2 SAE Brake Materials Environmental Task Force (SAEBMETF) and Brake Manufacturers Council (BMC / Heavy Duty BMC) memberships have agreed on a recommended product marking scheme to address the requirements of the California and Washington State “Copper” Bills

COSMO | PRODUCT CHEMICAL ASSESSMENT ENGINE CONFIDENTIAL Concensed Product Marking Scheme 3 Recommended scheme is comprised of an environmental code (i.e. one letter) and a two digit year of manufacturer code would be added to the existing supplier product marking after the current two letter friction coefficient field. Environmental Codes are: A = indicates the friction material (fm) meets requirements for heavy metals and asbestiform fibers B = indicates the fm meets “A” requirements above, plus conforms to the 5% by weight copper limit C = indicates the fm meets “A” requirements above, but meets the 0.5% by weight copper limit X = indicates the fm is exempted or an extension material from the CA and WA bills Two digit year of manufacturer code is one digit for the decade and another for the year (e.g., 14 = 2014).

COSMO | PRODUCT CHEMICAL ASSESSMENT ENGINE CONFIDENTIAL Product Marking (Lining Edge Code) Status 4 SAE Brake Lining Standards Committee is to begin revising J866 or develop a new standard beginning June 2011 to adopt the recommended marking scheme as outlined on page 3. A “Location of Code” has been discussed in the SAEBMETF. Specifically, the appropriate code designation will be legibly marked on an external non-contacting surface in letters not less than 2.8 mm in height. If the marking is on the edge of the friction material and the thickness is less than 3.2 mm, the markings must be no more than 0.4 mm less than the lining thickness and must be legible. The SAE/MEMA recommended marking scheme will be formally shared with California and Washington Regulators that are on the SAEBMETF at the next task force meeting.

COSMO | PRODUCT CHEMICAL ASSESSMENT ENGINE CONFIDENTIAL Open and Potential Product Marking Issues 5 How are we to deal with friction materials that are exempted in one state but not another? One significant area of discrepancy is trailer brake friction material: non-exempted in CA, but exempted in WA (maybe WA will change their position). Companies will have to be diligent to prevent the exempted material from getting into a non- exempted state. How will the material be product marked? What would the BMC propose for product coding should the state(s) reject our recommended product for “X” to cover both exempted as well as material that have extensions? Potentially, one could visualize that a state may require an extension number and/or another date when the extension has expired?

COSMO | PRODUCT CHEMICAL ASSESSMENT ENGINE CONFIDENTIAL Open and Potential Product Marking Issues (cont.) 6 Should (have) the states be approached to seek reciprocity for materials that are granted an extension or exemption in one state be applied to another state? This will obviously cause a significant material control issue for companies if the materials are not addressed uniformly by the states. Both CA and WA have verbiage in their respective laws that refer to disclosing financial hardship data as well as technical challenges for a company to seek an exemption or extension on a specific vehicle model application. Has the BMC membership discussed what testing or technical data would a company submit to CA and WA seeking an exemption? If none of the BMC membership will be requesting an exemption or an extension, this is a moot point.

COSMO | PRODUCT CHEMICAL ASSESSMENT ENGINE CONFIDENTIAL 6 Thank you for the dialog and support! Steve Brown